Magazine

Not Your Papi's Network

June 04, 2006

In deadpan voices, a half-dozen Latinos make their pitch in a black-and-white television ad. The camera flicks to their somber faces. One by one, they implore Americans to help smuggle illegal immigrants across the U.S.-Mexico border. The more who come, the more gardeners, construction workers, pool cleaners, and busboys will be available to do the hard work while "white Americans" relax. Summing up their cause, a male Latino reminds viewers that just one more illegal immigrant can make a big difference in how much time they have to kick back. Then he invites them to find out more by visiting the group's Web site: www.sneakoneacross.com.

Of course, it's all in jest, an irreverent sketch in the service of Unacceptable Behavior, a Saturday Night Live-esque comedy show populated almost exclusively by Latino actors that airs Friday nights at 11 on upstart cable channel S? TV. With its lineup of original Latino-themed programs, S? TV, launched in February, 2004, is an anomaly in the hot Hispanic media business. Unlike traditional conglomerates that air campy tele-novelas and variety shows in Spanish, S? TV is hunting for young Hispanics who are comfortable watching TV in English -- but are clamoring for hip programs that speak to their Latino roots. "The market is heading that way," says Mauro Panzera, senior director of multicultural marketing at cable company Comcast Corp. (CMCSA).

Indeed, S? TV is hoping to ride a seismic shift in the U.S. Hispanic population. Data released in early May by the U.S. Census Bureau show the number of U.S.-born Hispanics topped new immigrants by 75%, or more than 400,000 people, between July, 2004, and the same month in 2005. By 2020 second- and third-generation immigrants are expected to account for 66% of the estimated 60 million U.S. Hispanics. "We're not talking about a niche," says S? TV CEO Michael Schwimmer, a former programming chief at satellite company EchoStar Communications (DISH). "We're talking about mainstream America."

LANGUAGE LESSONS

But for Sí TV, becoming mainstream won't be automatic. Between cable and Echostar's DISH Network, the Los Angeles-based channel reaches just 12.5 million households and is expected to generate $6.8 million in advertising revenue this year, according to Kagan Research LLC. By contrast, a fully distributed channel can count on about 90 million homes. Sí TV is dwarfed by established Spanish-language rivals such as NBC Universal's Telemundo (GE) and broadcaster Univision Communications Inc. (UVN), which will pull in $831 million in ads this year. During the week of Apr. 17, the top 13 programs watched by Hispanic households were Univision's. (The broadcaster pulled the plug on its own bilingual network, Galavision, in 2002.)

Whether to target the nation's Hispanics in Spanish or English has bedeviled marketers for years. But U.S. Census Bureau data show that 75% of Hispanics describe themselves as bilingual or English-dominant. And analysts say young Hispanics are more likely to acculturate -- maintain their Latino roots, even as they speak English -- rather than completely assimilate. The upshot: "Marketing to Hispanics is increasingly going to be in-culture instead of in-language," says Felipe Korzenny, a professor of Hispanic marketing at Florida State University. That's what Jeff Valdez, a former stand-up comic, realized in 1998 when he conceived of the idea for Sí TV. Now, in a riff on the famous line from the movie Jerry Maguire, a tag line on the network's own ads reads: "You lost me at Hola!"

Corporate marketers are slowly waking up to the new Hispanic demographics. Sure, sticking exclusively with English programming could mean viewers -- and advertisers -- defect to big networks like ABC and CBS. But Sí TV is winning converts. Next year, Kagan Research expects the channel's total ad dollars to surpass those of rival Mun2, the bilingual cable channel owned by Telemundo. Revenues remain small, but Sí TV's lineup of 68 advertisers, up from 26 in 2004, includes big-name brands such as Burger King, Toyota Motor (TM), and Wal-Mart Stores (WMT). The reason? Companies realize they can no longer afford to plow all their ad spending into Spanish-language pitches targeting recent arrivals. Last year consumer goods giant Procter & Gamble Co. (PG) shifted some ads from nonassimilated Spanish-speaking Latinos to a niche it calls "living in the hyphen" -- bilingual, bicultural Latinos who grew up in the U.S. but were reared in Hispanic households. P&G ran ads for Cover Girl and Pantene shampoo on Sí TV last year to tap that market.

The rumblings of change irk executives at Univision. Put up for sale in February by CEO Jerrold Perenchio, the network -- which frequently beats the big four networks in prime time -- could fetch as rich a price as $13 billion. Mexican broadcaster Televisa is teaming with private equity to pursue a bid. Univision's success was built on catering to Spanish-speaking newcomers who clamor for a taste of home. But many young Latinos find its all-Spanish programs passé. "They risk losing an entire generation," warns Jon Mandel, co-chairman of media buyer MedicaCom. Still, Univision is adamant that it won't add English to the lineup. "It's not what we do; it's not what we know," says Thomas F. McGarrity, co-president of network sales at Univision.

That reluctance to change gives Sí TV a big opening. On its show The Rub, young Latinos banter in English about the ups and downs of relationships -- and often address a Latino taboo: confessing to Mami and Papi about premarital sex. Try finding a program like that on Univision.